topic Re: 4 years of work, now at a standstill in General Credit Topics

4 years of work, now at a standstill

shasta — Fri, 04 Nov 2011 18:08:53 GMT

I've been reading these forums and have seen a lot of helpful information.

I have had a lot of credit issues in the past, due to being laid off, being a student and just being irresponsible. In 2007, I got laid off and was hit with a closure of my amex card (years of faithful use, was never late or delinquent). AMEX said my change in status made me a risk to not pay, so they closed my account. Well, I woke up and started paying close attention to all of my credit cards and accounts.

For the last 2 years, I have never been late on any payment (credit card, student loan, etc.), have paid down my debt to income ratio and have disputed several items and have had them removed. However, there are still about 6 or 7 items (credit cards and student loans) that have been closed and paid. Some are 2008 and 2009 and were delinquent, but I paid them off and closed them. They are showing as paid and closed but still are a "collection item".

My scores are currently: FICO 662, TU 687 and Experian 642. In 2007 the scores were in the low 500's. So, I have seen improvement over the last 4 years, but I am now at a standstill because I have paid off everything that I could, disputed everything that I could and my scores are just standing still.

Any thoughts?

Re: 4 years of work, now at a standstill

TilltedBrim — Fri, 04 Nov 2011 18:28:26 GMT

I was hesitant to reply seeing that I don't have very many post and come here looking for answers all the time. However, it sounds to me that you could benefit a lot at this stage by applying for some new credit. With your scores and 0 balances there are certainly people here that can advise you and point you in the right direction on where you should start. By the way welcome... there are a ton of really helpful and friendly people here.

Re: 4 years of work, now at a standstill

Anonymous — Fri, 04 Nov 2011 18:53:43 GMT

@shasta wrote:
I've been reading these forums and have seen a lot of helpful information.

I have had a lot of credit issues in the past, due to being laid off, being a student and just being irresponsible. In 2007, I got laid off and was hit with a closure of my amex card (years of faithful use, was never late or delinquent). AMEX said my change in status made me a risk to not pay, so they closed my account. Well, I woke up and started paying close attention to all of my credit cards and accounts.
For the last 2 years, I have never been late on any payment (credit card, student loan, etc.), have paid down my debt to income ratio and have disputed several items and have had them removed. However, there are still about 6 or 7 items (credit cards and student loans) that have been closed and paid. Some are 2008 and 2009 and were delinquent, but I paid them off and closed them. They are showing as paid and closed but still are a "collection item".
My scores are currently: FICO 662, TU 687 and Experian 642. In 2007 the scores were in the low 500's. So, I have seen improvement over the last 4 years, but I am now at a standstill because I have paid off everything that I could, disputed everything that I could and my scores are just standing still.

Any thoughts?

IMO I would use the CC upto 5% and PIF as soon as the statement si generated. This payment method for few months will show you a boost in your score

Re: 4 years of work, now at a standstill

shasta — Fri, 04 Nov 2011 19:07:42 GMT

Unfortunately, I don't have any open credit cards. I made the mistake of closing all of my credit cards and paying them off. The only open accounts that I have now are 2 student loans. I was going to buy a used car to try and get an open loan, but I was denied. I was told by the bank that 650 is their minimum credit requirement, and mine was pulled by the bank at a 662, however, i have about 6 collection accounts showing (even though they are paid in full). I was denied for too many collection accounts.

Re: 4 years of work, now at a standstill

kjm79 — Fri, 04 Nov 2011 19:24:11 GMT

You might need to start with a secured credit card. Do a little research on the credit card forum and see what might work best for you. If you can get into a local credit union and start building a relationship with them it will help you out tremendously in the long run. Establishing some new positive credit is what you've really got to do. FICO dings you if you aren't actively using credit. Get a new cc as suggested and use if a few times a month and pay it off in full. You'll see a lot of posts about utilization and how you should have approx 1-9% report on ONE card to optimize your score. I wouldn't worry about that at this stage, just keep that in mind when you want to apply for some new credit (like a car loan for example). That's when you really want to maximise your score and should really concentrate on utlization. Until then, just start rebuilding. Your student loans are installment loans so unless you NEED a new car, opening another installment loan won't really help your score much. You could try the capital one pre-approval website. Not a great company/card but most people will tell you every card has its purpose and they are a good rebuilder card.

You could also start writing some goodwill letters to your creditors and ask them to remove lates or collection accounts. They have no obligation to but some do tend to extend goodwill for people. All it will cost you is a stamp.

And lastly, make sure you are working with real FICO scores. Can't get an Experian FICO score unless you get is from a lender. And there are so many different non-FICO scores out there to make it more confusing for everyone. Good luck to you!

Re: 4 years of work, now at a standstill

Anonymous — Fri, 04 Nov 2011 20:11:03 GMT

@shasta wrote:
i have about 6 collection accounts showing (even though they are paid in full). I was denied for too many collection accounts.

Work on getting those 6 paid collection accounts removed from your credit reports. Send goodwill letters and, keep sending goodwill letters until those 6 paid collection accounts are no longer on your credit reports and you will cease to be at a standstill.

Also, start rebuilding your credit with some credit cards.

Keep climbing the mountain -- shasta

Re: 4 years of work, now at a standstill

Guava — Fri, 04 Nov 2011 20:21:48 GMT

I would do 2 things:

- Like kjm79 said above, obtain a revolving credit card. A secure card from a bank (I've heard a lot of good thing about Capital One secure card as a starting point) or credit union is probably best. Overtime, a well-managed credit card will add a lot of good info on your profile.

- The 2nd course of action is sending out goodwill letter. A new credit card will help your scores but that change happens really slowly. If accepted, a GW letter will have much more of an impact. llecs made an awesome thread about GW letter Q&A, Examples, and GW Success Stories. I think it could be helpful to you.

Good luck with it!

Re: 4 years of work, now at a standstill

RobertEG — Sat, 05 Nov 2011 07:26:28 GMT

Applying for new credit with major derogs in your CR is a catch-22. You want to get new credit, and establish flawless performance, but you face disapproval or poor offers until your FICO score supports your applications for desirable new credit.

Thus, before applying for new credit, I would first make every effort to attempt to clean out the old derogs. A barrage of GW letters is the obvious first step.

How old are the derogs, and what are their normal CR exclusion dates? For collections, that involves the determination of the DOFD on the OC account that led to the collection. Are any approaching their CR exclusion dates?